Monday May 25, 07:43 PM
France's Dassault likely back in race for Indian warjet deal
By Pratap Chakravarty
NEW DELHI (AFP) - French firm Dassault Aviation (Paris: FR0000121725 - news) , expelled from a 12-billion-dollar Indian warjet contract, is now likely to rejoin the race, with five other global firms vying for the deal, officials said Monday.
"Dassault Aviation has been cleared to put up its Rafale fighter jet for field trials," an Indian defence ministry official said, adding that the approval came last week from the policy-making Defence Procurement Board.
The French company, one of six contenders for the mammoth contract, was declared out of the race on April 16 after the military said it failed to meet technical requirements.
"Dassault was dropped as it did not meet user requirements but the decision to re-induct it into the bidding was taken after the company offered the missing answers," the official told AFP, speaking on condition of anonymity.
However, "since a new government is now in place the final call is with the defence minister," he said.
A formal decision on Dassault's participation was likely later this week, he said.
India's Congress-led coalition government swept back to office after elections this month.
The official denied any suggestion that the U-turn was a result of diplomatic intervention by France.
Industry sources have said that US-based Lockheed Martin (NYSE: LMT - news) , offering the F-16, and Boeing (NYSE: BA - news) , with its F-18 "Superhornet", are the front-runners in bidding for the 126-jet contract.
The European Aeronautic Defence and Space Company has offered its Typhoon Eurofighter, while Russian manufacturers of the MiG-35 and MiG-29, as well as Sweden's Saab (Stockholm: SAABB.ST - news) , which makes the Gripen fighter, are also in the running.
India issued the request for proposals to six short-listed global aviation giants in August 2007 and the companies submitted their bids last year.
The contract includes the outright purchase of 18 fighter jets by 2012 with another 108 to be built by HAL in India under a "transfer of technology agreement." India also wants the option to buy 64 more jets.
India, the biggest buyer of military hardware among emerging nations, is expected to select fighters from at least two different firms.
The contending fighter jets will be put through rigorous tests scheduled to begin next month.
Meanwhile, the defence ministry official said India would hand a one-billion-dollar contract for six mid-air refuelling aircraft to Europe's Airbus (Paris: NL0000235190 - news) instead of to Russia, which supplies 70 percent of India's arms.
"We have now decided in favour of the Airbus-330 refueller and not the Russian Ilyushin-76s, which has been in service with us for six years," the ministry official said.
"The deal with Airbus will be cleared by the cabinet next month," he said, adding Delhi was also sending officials to Moscow to close a protracted row over the cost of a Soviet-era aircraft carrier that India wants by 2011.
Russia wants two billion dollars over and above 1.5 billion dollars it had initially agreed to refurbish the carrier for the Indian navy.
"We are time-lining all negotiations as we want the deal to materialise by July-end or else we start looking at other options," a naval official warned.
Similar commercial disagreements and late deliveries have pushed New Delhi towards Western suppliers in recent years.
India plans to spend up to 30 billion dollars by 2012 to upgrade its military.
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